Weaknesses in owner control of state enterprises

Ingress

The ministries’ follow-up of state enterprises is inadequate when it comes to checking that the stipulated goals are achieved. There are also substantial weaknesses in relation to ensuring that the companies’ boards of directors function satisfactorily. 'Inadequate follow-up creates a significant risk of the state losing large sums and important social responsibilities not being satisfactorily attended to,' says Director General Therese Johnsen at the Office of the Auditor General.

Published
11/10/2009 12:35 PM

Brødtekst

The annual audit of the ministries’ management of state enterprises for 2008, the Office of the Auditor General’s Document No 3:2 (2009–2010), was submitted to the Storting on 10 November. The goal of the corporate control is to assess whether the state’s interests in companies have been managed in accordance with the decisions and intentions of the Storting.

In the Office of the Auditor General’s opinion, several ministries have not followed up the companies' results in accordance with the Government’s intentions for active ownership.

The ministries receive limited information about how the boards of directors function, nor do they adequately follow up that the boards of directors carry out self-evaluations.

The regional health authorities

Over a number of years, the regional health authorities’ reporting to the Ministry of Health and Care Services has been inadequate and of variable quality. It is therefore uncertain whether the Ministry receives sufficient information to enable it to assess how the regional health authorities attend to their responsibility for ensuring the provision of specialist health services for the population of the region.

In 2008, there were still many errors in the medical coding on which the activity-based financing (ISF) system is based. There has been no significant improvement since the 2003 audit. This may indicate that the implemented measures have not given the expected results. The quality of the coding must be improved in order to ensure that the basis for the state allocations is correct, and in order to ensure that the health authorities have correct and reliable information about resource utilisation.

The practice of postponing treatment deadlines for patients in interdisciplinary specialist treatment for substance abusers in the South-Eastern Norway Regional Health Authority can result in serious violations of the Patients' Rights Act. Patients are misled into accepting postponement of the original treatment deadlines, stipulated on the basis of a medically justifiable waiting period, because of capacity limitations on the part of the institution. The patients do not receive sufficient correct information to enable them to give their informed consent to the deadline being postponed, and they are therefore not in a position to safeguard their own rights.

In the period 2006 to 2008, waiting times for priority patients in somatic health care have increased, and the great regional variations in how the priority regulations are practised have persisted. The Ministry of Health and Care Services must focus more on this trend in order to ensure that somatic patients receive the health care to which they are entitled regardless of where they live.

The expansion and financial performance of Posten Norge AS

During the period 2004 to 2008, Posten Norge AS has not achieved the high profitability on new services that was a condition for the company's expansion. Although profitability must be assessed in a longer-term perspective, the Office of the Auditor General finds that there are grounds for concern when the new activities have not made a greater contribution to strengthening Posten Norge AS's overall profitability.

Since 2004, Posten Norge AS has been actively and strategically positioning itself in the areas of logistics and ICT through an expansion of its own activities and the acquisition of other Nordic enterprises. The Office of the Auditor General considers the profitability of the acquisitions to be a very important precondition for the implementation of the company's acquisition strategy. It is therefore important that the Ministry of Transport and Communications improves its follow-up of the results of Posten Norge AS’s expansion.

In the years 2005 to 2008, Avinor’s costs increased more than before it became a limited liability company. Developments during this period were marked by relatively high wage growth combined with an increase in the number of full-time equivalents in the company. Moreover, Avinor has had a shortage of air traffic controllers for several years, and this situation will continue for a number of years to come. The investigation shows that Avinor faces challenges in relation to both the capacity of the air-navigation service and acceptable cost development.

During the whole period 2003 to 2008, Avinor did not have all the necessary emission permits and it violated the emission permits it did have at a significant number of airports. Avinor has reported the lack of emission permits to the Ministry of Transport and Communications every year. In the Office of the Auditor General’s assessment, it creates a legitimacy problem for the Norwegian state that the Ministry of Transport and Communications, as owner of Avinor, accepts violations of the Pollution Control Act. "It warrants criticism that the Ministry of Transport and Communications has not followed up Avinor’s lacking emission permits," says Director General Therese Johnsen.

NRK’s commercial activities

In recent years the commercial activities of the Norwegian Broadcasting Corporation (NRK), which are organised in its subsidiary NRK Aktivum, have not produced financial results that contribute to strengthening public service broadcasting. In the Office of the Auditor General’s assessment, it is not financially satisfactory that NRK has not achieved a better return on the capital represented by secondary utilisation of NRK productions. Moreover, in the Office of the Auditor General's opinion, a weak return over time could mean that the capital increase carried out in 2006 could be seen as a form of subsidising of NRK Aktivum.

SIVA’s innovation programmes – a contribution to economic development and growth in rural areas

The investigation shows that the programmes and measures, which are primarily intended to have an effect in rural areas, have helped to create few new jobs in such areas. It is important that the state has policy instruments to facilitate growth and development in rural areas. The Office of the Auditor General therefore stresses that the programmes in question must be organised in such a manner that they can contribute to new enterprises being established and new jobs being created in parts of the country where this is most difficult.

The document can be downloaded in Norwegian from www.riksrevisjonen.no. Public institutions can order the document from Government Administration Services, tel. + 44 22 24 20 00, publikasjonsbestilling@dss.dep.no. Others can order it from Fagbokforlaget AS, tel. + 47 55 38 66 00, offpub@fagbokforlaget.no .

The deferral of public access to documents prepared by or for the Office of the Auditor General in connection with Document No 3:2 (2009-2010), cf. the Act relating to the Office of the Auditor General section 18 second paragraph, is hereby set aside.